Question

Yarun has a utility function of the form U=X^(2/3)Y^(1/3). Good X is a normal consumption good while good Y is healthcare. Yarun's income is limited at only 100 coins. While good X is relatively inexpensive at 1 coin per unit, good Y costs 3 coins per unit. The Small Council has decided to purchase 30 units of healthcare for each low income individual like Yarun. How much will this increase Yarun's consumption of health care? How much will this increase Yarun's consumption of X?

Answer #1

A consumer has preferences represented by the utility function
u(x, y) = x^(1/2)*y^(1/2). (This means that
MUx=(1/2)x^(−1/2)*y^(1/2) and MUy =1/2x^(1/2)*y^(−1/2)
a. What is the marginal rate of substitution?
b. Suppose that the price of good x is 2, and the price of good
y is 1. The consumer’s income is 20. What is the optimal quantity
of x and y the consumer will choose?
c. Suppose the price of good x decreases to 1. The price of good
y and...

Consider a consumer with a utility function U =
x2/3y1/3, where x and y are the quantities of
each of the two goods consumed. A consumer faces prices for x of $2
and y of $1, and is currently consuming 10 units of good X and 30
units of good Y with all available income. What can we say about
this consumption bundle?
Group of answer choices
a.The consumption bundle is not optimal; the consumer could
increase their utility by...

Quantity of Good X (units)
Marginal Utility (Good X)
Quantity of Good Y (units)
Marginal utility (Y)
1
22
1
16
2
21
2
15
3
20
3
14
4
18
4
13
5
16
5
12
6
14
6
11
7
12
7
10
Consider an individual who is deciding on how much of good X and
good Y to buy in order maximize her utility. The individual has $56
to spend on the two goods and the price...

Claraís utility function is u (x; y) = (x + 2) (y + 1) where x
is her consumption of good x and y is her consumption of good
y.
(a) Write an equation for Claraís indi§erence curve that goes
through the point (x; y) = (2; 8).
(b) Suppose that the price of each good is $1 and Clara has an
income of $11. Can Clara achieve a utility level of at least 36
with this budget? (
c)...

Quantity of Good X (units)
Marginal Utility (Good X)
Quantity of Good Y(units)
Marginal Utility (Good Y)
1
32
1
24
2
28
2
20
3
24
3
16
4
20
4
12
5
16
5
10
6
14
6
10
7
12
7
9
8
10
8
8
Consider an individual who is deciding on how much of good X and
good Y to buy in order maximize her utility. The individual has $20
to spend on the two...

) A consumer's utility function is given by: U(x,y) = 10xy
Currently, the prices of goods x and y are $3 and $5, respectively,
and the consumer's income is $150
. a. Find the MRS for this consumer for any given bundle
(x,y)
. b. Find the optimal consumption bundle for this consumer.
c. Suppose the price of good x doubles. How much income is
required so that the Econ 201 Beomsoo Kim Spring 2018 consumer is
able to purchase...

The utility that Mark receives by consuming good X and good Y is
given by u(X,Y) = XY.
1) Draw the indifference curve associated with a utility level
of 12 and the indifference curve associated with the utility level
of 36.
2) Suppose that X costs $1 per unit and Y $3 per unit. Mark has
$12 to spend on X and Y. Graph the budget line that he faces.
3) Derive Mark’s demand functions. What is the
utility-maximizing choice...

A consumer derives utility from good X and Y according to the
following utility function:
U(X, Y) = X^(3/4)Y^(1/4) The price of good X is $15 while good Y is
priced $10. The consumer’s budget is $160. What is the utility
maximizing bundle for the consumer?
.

Jen’s utility function is U (X, Y ) = (X + 2)(Y + 1), where X is
her consumption of good X and Y is her consumption of good Y .
a. Write an equation for Jen’s indifference curve that goes
through the point (X, Y ) = (2, 8). On the axes below, sketch Jen’s
indifference curve for U = 36
b. Suppose that the price of each good is 1 and that Jen has an
income of 11....

Jim’s utility function for good x and good y is U(x, y) =
X^1/4*Y^3/4.
1. Calculate Jim’s marginal utilities for good x and good y.
2. Calculate Jim’s Marginal rate of substation of his utility
function.

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